PROJECT REPORT

M/S. SAMARTH SAI PHARMA

CA SHREYANS TEJPAL SHAH

 HIGHLIGHTS OF THE PROJECT

1. Name of the Firm : M/S. SAMARTH SAI PHARMA

2. Address of unit : C S No. 869/1A, Gaon bhag, Sangli

3. Constitution : Proprietorship

4. Nature of Activity : Trading of Pharmaceuticals, Medicines and

allied products

5. Contact Person : Mr. Yuvraj Shivaji Dhumal

6. Working Capital Funding : ₹ 1.50 Lakhs

7. Means of Finance : Capital ₹ 0.30 Lacs

Bank Loan ₹ 1.50 Lacs

Total ₹ 1.80 Lacs

Project Report of M/s. Samartha Sai Pharma, prepared by CA Shreyans Tejpal Shah
 PROJECT REPORT
OF
PHARMACEUTICALS AND MEDICINE SHOP
M/S. SAMARTH SAI PHARMA

INTRODUCTION

Pharmaceutical and medicine shop, commonly known as “Medical” does not need any
introduction. Everyone in everyday life visits a medicine shop for one or other reason to buy
medicines, other pharma products or some allied products or lastly chocolates.

The proprietor has proposed to start a new pharmacy shop in Gaon Bhag area of
Sangli, where such shops are scarce and demand is good enough due to least competition. He
is in this business for more than 5 years and thus has a good study of the demand and the
market.

Project Report of M/s. Samartha Sai Pharma, prepared by CA Shreyans Tejpal Shah
INTRODUCTION AND CONSTITUTION OF THE FIRM

This project is proposed by Mr. Yuvraj Shivaji Dhumal in his proprietary capacity with
the trade name as M/s. Samarth Sai Pharma.

LAND AND BUILDING

This project is proposed at C S No. 869/1A, Gaon bhag, Sangli, where the proprietor
has taken a shop space on lease rent. The said area does not have similar shops and thus
resulting into lesser competition as the business of pharmacy shops tends to a little bit area
based.

PRODUCTS

Following are some examples of the items to be stocked: -

1. Medicines
2. Pharmaceutical materials
3. Ayurvedic medicines and allied products
4. Doctor recommended food supplements

MACHINERY

There are no machinery required other than a fridge for the project as it is a purely
trading concern. Fridge (refrigerator) is required for some heat sensitive medicines and
injections which are required to be stored at cooler temperature.

CAPACITY

Being a trading business, capacity cannot be defined and quoted. After studying the
existing demand and availability of the business, the proprietor estimates the business. The
financial projections are based on the same.

*****

Project Report of M/s. Samartha Sai Pharma, prepared by CA Shreyans Tejpal Shah
 M/S. SAMRATH SAI PHARMA

PROJECT OF MEDICAL AND PHARMACY STORE

COST OF PROJECT :
₹ Lacs

Land & Building Leased

Machinery (Fridge) 0.10

Electrical Installation 0.10

Furniture & Other Assets 1.50

Other Assets 0.10

1.80

MEANS OF FINANCE :

Equity Share Capital 0.30

Bank Term Loan 1.50

1.80

REQUIREMENT OF WORKING CAPITAL

Stock in Trade 1.60

Other Current Assets 0.15

1.75

Margin 0.25

Bank Finance 1.50

Cash Credit 1.50

Project Report Of M/s. Samartha Sai Pharma, Prepared by CA Shreyans Tejpal Shah
INTEREST

Bank Term Loan @ 11.00% 0.17

Bank Cash Credit @ 11.00% 0.17

0.33

DEPRECIATION ₹ In Lacs

Other Assets 10% 0.03

Furniture 15% 0.23

0.26

LABOUR Qty Salary / Month Months ₹ In Lacs

Sales Staff 2 8500.00 12.00 2.04

Helpers 2 6500.00 12.00 1.56

3.60

POWER

Load Connected 2.00 KW

Maximum Demand 2.00 KW

Consumption per day 10.00 Units

Consumption Per Year 3000.00 Units

Total Cost @ ₹ 15.00 0.45 ₹ Lacs

Project Report Of M/s. Samartha Sai Pharma, Prepared by CA Shreyans Tejpal Shah
SALES / REVENUE ₹ Lacs

Pharmaceuticals and Medicines 24.00

Other Allied Sales 6.00

30.00

CONSUMABLES ₹ Lacs

Pharmaceuticals and Medicines 15.60

Allied Materials 3.60

19.20

Project Report Of M/s. Samartha Sai Pharma, Prepared by CA Shreyans Tejpal Shah
PROFITABILITY STATEMENTS : @ 80 % operating ₹ In Lacs

Sales 30.00

30.00

Less :
Consumables 19.20

Labour 3.60

Power 0.45

Operating Expenses 0.90

24.15 24.15

5.85
Less : T. L. Interest 0.17

C. C. Interest 0.17

Depreciation 0.26

Lease Rent 1.20

1.79 1.79

Net Profit Before Tax 4.07

Less :- Income Tax @ 10% 0.41

Net Profit After I. Tax Prov. 3.66

Add :Depreciation 0.26

CASH ACCRUALS 3.91

Loan Instalments 0.30

D. S. C. R. 8.77

Project Report Of M/s. Samartha Sai Pharma, Prepared by CA Shreyans Tejpal Shah
 BREAK EVEN POINT ANALYSIS

₹ In Lacs

I II III IV V

Fixed Costs

Depreciation 0.26 0.22 0.19 0.16 0.14

Interest on term loan 0.17 0.13 0.10 0.07 0.03

Wages / Salaries : Fixed : 80 % 2.88 3.17 3.48 3.83 4.22

Utilities : Fixed : 20 % 0.00 0.00 0.00 0.00 0.00

Rent / Lease 0.90 0.99 1.09 1.20 1.32

4.20 4.51 4.86 5.26 5.70

Variable Costs

Raw Materials 19.20 21.12 23.23 25.56 28.11

Power & Fuel 0.45 0.50 0.54 0.60 0.66

Salaries & Wages : Variable : 20% 0.72 0.79 0.87 0.96 1.05

Utilities : Variable : 80% 0.00 0.00 0.00 0.00 0.00

20.37 22.41 24.65 27.11 29.82

Contribution 9.63 10.59 11.65 12.82 14.10

P/V ratio (contribution to sales) 0.32 0.32 0.32 0.32 0.32

Break even sales Rs.Lacs 13.08 14.04 15.14 16.38 17.77

Break Even % 43.61% 42.56% 41.71% 41.02% 40.46%

Project Report Of M/s. Samartha Sai Pharma, Prepared by CA Shreyans Tejpal Shah
 M/S. SAMRATH SAI PHARMA

PROFITABILITY STATEMENT (FIVE YEARS)

₹ in Lacs

PARTICULARS I II III IV V
Utilization % 80% 88.00% 96.80% 106.48% 117.13%
Sales 30.00 33.00 36.30 39.93 43.92

30.00 33.00 36.30 39.93 43.92

Less- Direct Expenditures

- Raw Material / Purchases 19.20 21.12 23.23 25.56 28.11
- Labour 3.60 3.96 4.36 4.79 5.27
- Power 0.45 0.50 0.54 0.60 0.66
- Mfg. Expenses 0.90 0.99 1.09 1.20 1.32

24.15 26.57 29.22 32.14 35.36

Gross Profit 5.85 6.44 7.08 7.79 8.56

Less- Indirect Expenditure :

- Interest on T. L. 0.17 0.13 0.10 0.07 0.03
- Interest on C. C. 0.17 0.17 0.17 0.17 0.17
- Depreciation 0.26 0.22 0.19 0.16 0.14
- Lease Rent 1.20 1.20 1.20 1.20 1.20

1.79 1.72 1.65 1.59 1.54

Net Profit Before I. Tax 4.07 4.72 5.43 6.20 7.03

Less- I. Tax Provision 0.41 0.47 0.54 0.62 0.70

Net Profit After I. Tax prov. 3.66 4.25 4.88 5.58 6.33

Add- Depreciation 0.26 0.22 0.19 0.16 0.14

Cash Accruals 3.91 4.47 5.07 5.74 6.46

Loan Instalment 0.30 0.30 0.30 0.30 0.30

D. S. C. R. 8.77 10.64 12.96 15.85 19.51

Average DSCR 13.55

Project Report Of M/s. Samartha Sai Pharma, Prepared by CA Shreyans Tejpal Shah
 CASH FLOW & FUND FLOW STATEMENT

₹ in Lacs

I II III IV V

Sources of Funds

Cash Accruals 3.91 4.47 5.07 5.74 6.46

Increase in Capital 0.55 0.00 0.00 0.00 0.00

Increase in Term Loan 1.50 0.00 0.00 0.00 0.00

Increase in Bank Borrowing 1.50 0.00 0.00 0.00 0.00

Increase in U/S Loan 0.00 0.00 0.00 0.00 0.00

Total Application (A) 7.46 4.47 5.07 5.74 6.46

Disposition of Funds

Pre-op Expenses 0.00 0.00 0.00 0.00 0.00

Increase in Capital Expenditure 1.80 0.00 0.00 0.00 5.00

Decrease in Term Loan 0.30 0.30 0.30 0.30 0.30

Decrease in Unsecured loan 0.00 0.00 0.00 0.00 0.00

Interest 0.00 0.00 0.00 0.00 0.00

Withdrawals 3.00 3.30 3.30 3.60 3.60

Increase in Working Capital 1.75 0.20 0.20 0.20 0.20

Others (specify) 0.00 0.00 0.00 0.00 0.00

Total Disposition (B) 6.85 3.80 3.80 4.10 9.10

Opening Balance 0.00 0.61 1.28 2.55 4.19

Net Surplus (A-B) 0.61 0.67 1.27 1.64 -2.64

Closing Balance 0.61 1.28 2.55 4.19 1.55

Project Report Of M/s. Samartha Sai Pharma, Prepared by CA Shreyans Tejpal Shah
 PROJECTED BALANCE SHEET

₹ in Lacs

I II III IV V
Liabilities

Proprietor's Capital 0.55 1.21 2.16 3.74 5.72

Profit for the year 3.66 4.25 4.88 5.58 6.33

Less Withdrawals 3.00 3.30 3.30 3.60 3.60

Capital in Business 1.21 2.16 3.74 5.72 8.44

Term Loans 1.20 0.90 0.60 0.30 0.00

Bank Borrowing for W. C. 1.50 1.50 1.50 1.50 1.50

Unsecured Loans 0.00 0.00 0.00 0.00 0.00

Total 3.91 4.56 5.84 7.52 9.94

Assets :

Gross Block 1.80 1.80 1.80 1.80 1.80

Depreciation 0.26 0.47 0.66 0.82 0.96

Net Block 1.55 1.33 1.14 0.98 0.84

Capital WIP 0.00 0.00 0.00 0.00 5.00

Current Assets 1.75 1.95 2.15 2.35 2.55

Cash & Bank balance 0.61 1.28 2.55 4.19 1.55

3.91 4.56 5.84 7.52 9.94

0.00 0.00 0.00 0.00 0.00

Note: -
Capital WIP denotes proposed expansion in future.

Project Report Of M/s. Samartha Sai Pharma, Prepared by CA Shreyans Tejpal Shah
 INTEREST SCHEDULE :

₹ in Lacs

PARTICULARS TERM LOAN INTEREST CASH CREDIT INTEREST

11.00% 11.00%

BALANCE 1.50 1.50

[-] 1st Yr. Installment 0.30 0.17 0.00 0.17

BALANCE 1.20 1.50

[-] 2nd Yr. Installment 0.30 0.13 0.00 0.17

BALANCE 0.90 1.50

[-] 3rd Yr. Installment 0.30 0.10 0.00 0.17

BALANCE 0.60 1.50

[-] 4th Yr. Installment 0.30 0.07 0.00 0.17

BALANCE 0.30 1.50

[-] 5th Yr. Installment 0.30 0.03 0.00 0.17

BALANCE 0.00 1.50

Project Report Of M/s. Samartha Sai Pharma, Prepared by CA Shreyans Tejpal Shah
 DEPRECIATION SCHEDULE

₹ in Lacs

PARTICULARS Other Assets Furniture Total Depr.

10% 15%

OP. BALANCE 0.30 1.50

[-] 1st YR. Depr. 0.03 0.23 0.26

W. D. V. 0.27 1.28

[-] 2nd Yr. Depr. 0.03 0.19 0.22

W. D. V. 0.24 1.08

[-] 3rd YR. Depr. 0.02 0.16 0.19

W. D. V. 0.22 0.92

[-] 4th Yr. Depr. 0.02 0.14 0.16

W. D. V. 0.20 0.78

[-] 5th Yr. Depr. 0.02 0.12 0.14

W. D. V. 0.18 0.67

Project Report Of M/s. Samartha Sai Pharma, Prepared by CA Shreyans Tejpal Shah